CORRUPTION IN GHANA II: FIGHTING BACK

C O N F I D E N T I A L SECTION 01 OF 04 ACCRA 002427

SIPDIS

STATE PLEASE PASS FOR TREASURY LUKAS KOHLER
USTR FOR LAURIE-ANN AGAMA
USDOC FOR MARIA RIVERO
MCC FOR ROD NORMAN

E.O. 12958: DECL: 11/15/2015
TAGS: EAID ECON GH PGOV PHUM PREL
SUBJECT: CORRUPTION IN GHANA II: FIGHTING BACK

REF: ACCRA 2425

Classified By: Ambassador Pamela E. Bridgewater for reasons 1.5 (B) AND
(D)


1. (C) Summary: Reftel looks at corruption in Ghana, and
this cable examines efforts to tackle the problem. Since
President Kufuor came to office in 2000, Ghana has passed
three anti-corruption laws, established an Office of
Accountability in the presidency, allowed a more free media
environment, and offered Ghana as the first country to
undergo a Peer Review under the NEPAD Peer Review Mechanism.
The GOG,s multiple anti-corruption agencies have had minor
success. Chief Justice Acquah has instituted important
reforms in the judiciary to address judicial corruption.
Civil society and the media are vocal on corruption issues.
Nonetheless, anti-corruption efforts in Ghana have a long way
to go and at times are seriously undercut by a lack of
political will. We can, and will play a greater role in
helping the fight against corruption, which is key to all our
MPP goals in Ghana. End summary.

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Government Talks the Talk
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2. (C) In his inaugural speech in 2000, President Kufuor
committed his government to "zero tolerance" of corruption.
In meetings with the Ambassador over the past year, the
President and Minister of Defense separately voiced concern
about corruption allegations and affirmed their commitment to
good governance, a message they also delivered in public
remarks. On November 14, 2005 in a speech read by the Foreign
Minister at an anti-corruption conference, President Kufuor
said "I reaffirm my government's zero tolerance for
corruption, and once again call on members of the political
class, public service, civil society and the entire nation to
accept the challenges so that we can collectively win the
war". He pointed out that the GOG has signed the UN
Convention Against Corruption and plans to submit to
parliament the African Union Convention on Preventing and
Combating Corruption.

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Government Anti-Corruption Institutions
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3. (U) The GOG has several anti-corruption institutions:

CHRAJ: The 1992 constitution mandated the establishment of
the Commission on Human Rights and Administrative Justice
(CHRAJ) to investigate all allegations of corruption and
misappropriated public funds, and to take countermeasures.
CHRAJ also has a mandate as a human rights commission and
ombudsman.

The Police: The Criminal Investigations Division (CID) of
the Ghana Police engages in fighting corruption and economic
crime. On June 27, the police created a new unit, the Police
Intelligence and Professional Standards Bureau (PIPS),to
investigate public complaints and alleged malfeasance by
police.

SFO: The Serious Fraud Office (SFO),under the Ministry of
Justice, is charged with investigating and prosecuting
offenses involving serious financial loss to the state. It
has expertise in detecting certain kinds of corruption and
economic crime (such as procurement fraud).

Office of Accountability: In 2003, President Kufuor
established this office within the presidency aimed at
preventing corruption by political appointees in government
and reinforcing a culture of transparency and good
governance.


4. (C) These institutions have had some success. In 2004,
the Serious Fraud Office (SFO) investigated 83 cases
involving appropriation of state assets by public officials,
tax evasion and procurement or contract fraud. This was
markedly down from 117 investigations in 2003. Acting
Executive Director T.A. Codjoe attributed this drop to
declining resources. In the majority of these cases, the SFO
either found no wrongdoing or is continuing to investigate.
The official said the SFO is unlikely to bring down any top
officials who condone, sanction or benefit from such
corruption because his agency receives signals to cool such
politically sensitive investigations, and that corrupt top
officials operate through underlings to cover their tracks.


5. (C) CHRAJ is working on a Conflict of Interest Regulation
as mandated by the constitution and plans to implement a new
electronic case management system for corruption
investigations. CHRAJ is aided by oversight from the
Accountant General,s office, the Auditor General and
Attorney General,s offices. The Accountant General's office
has trained 10,000 people on anti-corruption laws. The new
Auditor General has quickly moved to improve the performance
of his office, reducing backlogs. In addition, the GOG
created a new Ministry of Public Sector Reform. In July 2005
the Commissioner of Value Added Taxation fired a senior
official for accepting a $30,000 bribe from a distillery
company. The Ghana Education Service has set up task forces
to investigate reports of massive misappropriation of funds.



6. (C) Nonetheless, the GOG,s anti-corruption institutions
are under funded, understaffed, and lack adequate political
will. While they operate with some independence, they are
also subject to political influence. For example, the
President appoints all SFO Board members. The Director of
the Auditor General,s office admitted in a recent workshop
that the AG's independence is "a gray area". The Accountant
General rep noted that some public entities are outside the
purview of their organization. CHRAJ is run by an Acting
Commissioner who has limited powers and can be easily fired
by the President. The budgets of CHRAJ, the Auditor General
and the Accountant General were cut by 40-50% last year,
during a time of economic and budget growth. Coordination
between GOG anti-corruption agencies and other government
entities is poor. There is also some confusion about the
mandates and roles of CHRAJ and SFO in fighting corruption.

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Anti-Corruption Laws Weak
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7. (C) Ghana's constitution and the 1998 Declaration of
Assets and Disqualification Act require many public officials
to declare their assets to the Auditor-General. However, the
Auditor General interprets the law as barring him from
opening declarations except when compelled by formal
investigation. Neither the Auditor General nor CHRAJ have
the power to verify the accuracy of the declarations.


8. (C) In 2003, Ghana's parliament passed the Financial
Administration Act, the Internal Audit Agency Act, and a
Public Procurement Act to strengthen the anti-corruption
regime. Most observers believe that while these laws are
generally adequate, they have not yet been fully implemented.
According to a recent analysis by The Ghana Integrity
Initiative (the local chapter of Transparency International)
the Public Procurement law is overly vague, especially for
national procurements. It is limited to small tenders, fails
to establish auditing and oversight bodies as well as a legal
definition of what constitutes bribery, and lacks adequate
constraints on sole sourcing. The Public Procurement Board
is weak, with little staff and no permanent location,
although it claims to have increased the transparency in
public tender advertisements.

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Chief Justice Speaks Out
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9. (C) Chief Justice Kingsley Acquah has been very
outspoken against corruption, especially in the judiciary.
He published the judiciary's first-ever annual report in
2004, which details efforts to modernize and improve
transparency in the courts through automation, creation of a
commercial court and Fast Track courts, and reforming
magistrate courts. The 2005 annual report focuses on the
Supreme Court,s new Code of Ethics and its upgrading and
expansion of the Court Inspectorate and Public Complaints
Unit, which received four complaints about judicial
corruption in June 2004-June 2005. Despite this activism,
corruption in the judiciary is tolerated. Acquah has at
times failed to show firm resolve against suspected corrupt
judges and others in the judiciary, including the Director of
the Law School, who is alleged to be involved in corrupt book
importation.

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Civil Society Also in the Fight
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10. (U) Ghanaian civil society is vocal about corruption.
The SFO and CHRAJ are members of the Ghana Anti-Corruption
Coalition (GACC),which includes GOG and NGO organizations
dedicated to fighting corruption through public advocacy and
advocacy for legal reforms. The Coalition continues to press
for passage of long-pending Whistleblower's and Freedom of
Information laws, and for adequate implementation of the
Public Procurement Act and other 2003 anti-corruption
legislation. (The Whistleblower bill is expected to pass in
this session of parliament.) The Institute of Chartered
Accountants, the Ghana Bar Association, and some business and
religious leaders have also been outspoken in criticizing
corruption.


11. (C) The Kufuor administration's early decision to
remove the criminal libel law (although there is still a
civil libel law) has helped foster a lively media, which
reports almost daily on alleged corruption. NGO and media
contacts tell Emboffs they generally feel free to probe and
report on corruption allegations without political
interference. However, newspapers are under some political
pressure to suppress stories about corruption. The editor of
the Enquirer, who has been very aggressive in reporting on
high level corruption, told PolChief on November 25 that he
has faced serious pressure from the president and his staff
to back off of corruption stories, especially related to his
investigation of the Confederation of African Football
stadium deal (which implicates the GOG in accepting bribes
from the Chinese) and the presidency's alleged use of
procurement kickbacks to fund the ruling party. He showed
polchief pictures of a recent attack on his car that
shattered a window. He said his landlord is being pressured
to evict him, his advertisers have been pressured to withdraw
funding to his newspaper, and he fears for his safety.

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What We Can Do
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12. (C) In 2004, we funded a successful anti-corruption
cartoon campaign through our Democracy and Human Rights Fund.
We also used INL funds to provide computers to an Internal
Monitoring Unit in the police and we gave limited support to
anti-corruption efforts in Customs. A significant step in
the right direction is USAID/Ghana,s proposed $500,000
Anti-corruption Reform Program, which is still in the design
phase but is examining ways to support the Auditor General,s
office, CHRAJ,s draft Conflict of Interest Regulation,
public sector reform, and other anti-corruption measures.


13. (C) We can do more. Corruption impacts all of our MPP
goals in Ghana and merits significant Mission focus over the
coming year. Post has made it a priority to raise corruption
issues in meetings with GOG officials and in public remarks
(as the Ambassador did several weeks ago at the November 7
Consultative Group meeting.) We will work with Ghanaian
businesses and professional associations to strengthen their
understanding of the economic costs of corruption, and their
ability to advocate for change on this issue. (Private
companies, especially Ghanaian ones, are reticent to touch
the issue both publicly and privately because they are
heavily dependent on government business.)


14. (C) We will also press the IMF, World Bank and other
donors here to insist on greater controls and transparency in
their transactions with the GOG. Ghana is rewarded heavily
for good governance with debt relief and significant
increases in donor funds, which may be signaling to the GOG
that donors do not perceive corruption to be a problem. We
will look for ways to better leverage donor funding
(including the MCA funds) to help combat corruption, through
conditionality, strong oversight and anti-corruption
components.


15. (C) We will work with Washington to identify funding to
support anti-corruption NGOs in Ghana, many of which are
doing good work but are woefully under-resourced. Our efforts
should focus on strengthening institutions and the
implementation of existing governance laws. We will also
work to raise public awareness of corruption, to improve
donor accountability, and to strengthen automation and
transparency in government transactions. We should
reinforce positive steps from the government and those within
the GOG -- such as the Chief Justice and the Minister of
Finance -- who seem committed to fighting corruption.

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Comment
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16. (C) This is a critical time to press the GOG on the
corruption issue. Ghana has a real chance to develop into a
middle-income nation, in part thanks to current high gold and
cocoa prices, good macroeconomic management, and a rising
flow of donor funds. Corruption in Ghana is not yet
regime-threatening or on a Nigeria scale. However, while
commending Ghana's economic and political successes, the USG
should also register our growing concern that corruption
could undermine economic development, investor confidence,
democratic development and Ghana's international reputation.


17. (C) The government seems to be slowly waking up to this
concern, in part because of media and donor pressure. As
Anna Bossman, Acting Commissioner of CHRAJ recently stated,
"Would anyone take Ghana seriously as we take up our seat on
the Security Council, hold the chairmanship of ECOWAS or the
AU if we are perceived by the world to be so notoriously and
irredeemably corrupt?" Recent press coverage suggests the
GOG has become more aggressive about combating corruption at
low levels. Ghana has adequate anti-corruption laws and
committed individuals in its anti-corruption institutions,
but their resources are small in comparison to the problem.

18.(C) As Bossman and the Chief Justice have publicly stated
in recent conferences, the fundamental problem in Ghana is
lack of political will to tackle corruption. The GOG's
failure to sufficiently fund anti-corruption institutions,
its reluctance to engage (or listen to) donors on corruption
issues, and its tolerance of high level corruption has
damaged its credibility. President Kufuor retained three
ministers in his second term who were held up during
parliamentary vetting because of corruption allegations. He
was slow in responding to reports of his inappropriate
involvement in the hotel purchase. The GOG has not responded
to opposition claims of widespread corruption involving HIPC
funds. All of this has the potential to hurt the ruling NPP
party's chances in the 2008 national elections, and to deepen
the long-standing complacency about corruption in Ghana,
whatever the political leadership. End comment.
























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